The Issue The issue for determination is whether Petitioner must reimburse Respondent an amount up to $1,048,242.62, which sum Petitioner received from the Florida Medicaid Program in payment of claims arising from Petitioner's treating of pediatric patients between October 28, 2000 and October 25, 2002. Respondent alleges that the amount in controversy represents an overpayment arising from Petitioner's submission of claims that were not covered by Medicaid, in whole or in part.
Findings Of Fact Respondent Agency for Health Care Administration ("AHCA" or the "Agency") is the state agency responsible for administering the Florida Medicaid Program ("Medicaid"). Petitioner The Children's Office, Inc. ("TCO") was, at all relevant times, a Medicaid provider authorized to receive reimbursement for covered services rendered to Medicaid beneficiaries. From time to time, therefore, TCO had entered into various written contracts with the Agency, which will be referred to collectively as the "Provider Agreement." Exercising its statutory authority to oversee the integrity of Medicaid, the Agency conducted a review or audit of TCO's medical records to verify that claims paid by Medicaid during the period from October 28, 2000 to October 25, 2002 (the "Audit Period") had not exceeded authorized amounts. During the Audit Period, TCO had submitted 30,193 claims for services rendered to 3,148 patients (or recipients), on which Medicaid had paid a total of $1,593,881.86. Rather than examine the records of all 3,148 recipients served, the Agency selected a sample of 30 patients, whose records were reviewed first by a nurse consultant, and then by a physician "peer reviewer." TCO had submitted 260 claims during the Audit Period in connection with the 30 patients in the sample population. Medicaid had paid a total of $13,582.78 on these claims. The Agency's reviewers determined that, for various reasons, TCO had received a total of $9,740.10 in reimbursement of claims in the sample for services not covered by Medicaid, in whole or in part. Having discovered this "empirical overpayment" of $9,740.10, the Agency employed a statistical formula to ascertain the "probable total overpayment" that TCO had received from Medicaid in connection with the 30,193 claims presented during the Audit Period.1 (TCO does not dispute the methodology that AHCA used in determining the probable total overpayment based on the empirical overpayment associated with the sample population. The parties agreed at hearing that if the undersigned were to find that the empirical overpayment should be adjusted, then the Agency——not the undersigned——would recalculate the probable total overpayment using the same statistical formula.) The statistical analysis revealed a probable total overpayment of $1,048,242.62. This is the amount that AHCA seeks to recoup from TCO. TCO's resistance to the Agency's proposed action proceeds along two main fronts. One involves systemic or global challenges to the audit as a whole, the aim being to land a knockout blow that would preclude that Agency from recouping any amount. The other entails fact-specific disputes about the reimbursement of individual claims in the sample, the goal being to reduce the empirical overpayment——and thereby reduce the probable total overpayment.2 The Systemic Challenges TCO's systemic challenges to the audit are largely, if not exclusively, legal in nature. Indeed, the relevant facts are not in dispute. The factual bases (including the pertinent statutory and regulatory language) for TCO's arguments are set forth below. 1. Florida Administrative Code Rule 59G-1.010(22) provides as follows: (22) "Audit" means: an examination of "records for audit" supporting amounts reported in the annual cost report or in order to determine the correctness and propriety of the report; or an analysis of "records for audit" supporting a provider's claim activity for a recipient's services during a year or less of claims activity in order to determine whether Medicaid payments are or were due and the amounts thereof, with claim activity for each separate year constituting a separate audit. The term "audit" also comprehends discussions and interviews related to said examination or analysis. Also see "records for audit."[3] (Emphasis added.) TCO asserts that the foregoing definition of the term "audit" limits AHCA to reviewing periods of no greater than one year at a time, per provider, when investigating possible fraud, abuse, or overpayment as part of its Medicaid oversight responsibility. Because the Audit Period is approximately two years, TCO argues that the audit should be deemed void.4 2. Section 409.9131(5)(a), Florida Statutes, requires that the Agency, in making a determination of overpayment to a physician, must, among other things, "make every effort to consider the physician's patient case mix, including, but not limited to, patient age and whether individual patients are clients of the Children's Medical Services Network." Many of TCO's patients were clients of the Children's Medical Services Network ("CMS"), a fact that, TCO contends, the Agency's reviewers failed adequately to take into account. Though the evidence on this issue is limited, the undersigned agrees with TCO——and finds——that, in general, AHCA's reviewers placed little weight on whether a particular patient participated in CMS. The Agency did, however, consider TCO's overall "case mix" and factors relevant thereto. The undersigned determines, as a matter of fact, that the Agency put forth a reasonable effort under the circumstances to "consider [TCO's] patient case mix" in accordance with the statute. The undersigned further determines that, in any event, "case mix" considerations are not dispositive of the disputed reimbursement issues at hand. 3. Section 409.913(5), Florida Statutes, provides that all Medicaid providers are subject to having goods and services that are paid for by the Medicaid program reviewed by an appropriate peer-review organization designated by the agency. The written findings of the applicable peer- review organization are admissible in any court or administrative proceeding as evidence of medical necessity or the lack thereof. (Emphasis added.) Section 409.9131(5)(b), Florida Statutes, adds that "when the agency's preliminary analysis indicates that an evaluation of the medical necessity, appropriateness, and quality of care needs to be undertaken to determine a potential overpayment" to a physician, the Agency must refer the claims at issue for "peer review." The term "peer review" is defined, for purposes of Section 409.9131, as follows: "Peer review" means an evaluation of the professional practices of a Medicaid physician provider by a peer or peers in order to assess the medical necessity, appropriateness, and quality of care provided, as such care is compared to that customarily furnished by the physician's peers and to recognized health care standards, and, in cases involving determination of medical necessity, to determine whether the documentation in the physician's records is adequate. § 409.9131(2)(d), Fla. Stat. (emphasis added). TCO argues that Section 409.913(5) "clearly requires" the use of a peer-review organization (rather than an individual peer) when auditing "non-physician claims," and it contends that this "requirement" should be held applicable, as well, to the review of physician service claims pursuant to Section 409.9131(5). In this case, the peer review of physician service claims was performed, not by an organization, but by Dr. Larry Deeb, a Florida-licensed pediatrician. Thus, TCO urges that the audit be declared invalid in its entirety. 4. It is undisputed that approximately four years elapsed from the beginning of the Audit Period to the issuance, on November 30, 2004, of the Final Agency Audit Report, which latter gave TCO a clear point of entry to challenge the Agency's overpayment determination. TCO contends that this four-year "delay" was prejudicial to TCO's ability to defend against AHCA's recoupment effort. Thus, TCO argues that this proceeding should be deemed time-barred. 5. TCO asserts, and AHCA did not genuinely dispute, that the medical records provided to the Agency during the audit reveal a number of Medicaid compensable services for which TCO never submitted claims. TCO argues that if an investigation into possible Medicaid overpayments yields information demonstrating the existence of valid, yet unmade claims, then the Agency is under a legal duty either to pay those claims or set them off against any overpayment that might be found. The Fact-Specific Disputes In addition to challenging the validity of the audit as a whole, TCO disputes, in the alternative, the Agency's determinations regarding 13 specific claims; it also urges that several miscellaneous adjustments be made as well.5 These will be examined below. First, however, it is necessary to make some preliminary findings, to place the disputed claims in context. The disputed claims involve what are known as "evaluation and management services" ("E/M services") provided in the doctor's office or other outpatient setting to new or established patients. E/M services are billed to Medicaid using codes that reflect the intensity level of service provided. The codes are called "CPT codes"——"CPT" being short for Current Procedural Terminology. Medicaid reimburses providers for E/M services pursuant to fee schedules that specify the amount payable for each level of service according to the CPT codes. It is the provider's responsibility, in presenting a claim to Medicaid for payment, to determine the appropriate CPT code for the service provided. Medicaid generally pays claims upon receipt, without second-guessing the provider's judgment regarding the level of care. When the Agency conducts an investigation to determine possible overpayment to a provider, however, one thing it might review is whether the provider's claims were properly "coded"—— that is, whether the CPT codes on the bills accurately reflected the level of service provided to the patients, as documented in the medical records. If the Agency determines that the level of service provided was lower than that claimed, then it will "downcode" the claim to the proper level and seek to recoup from the provider, as an overpayment, the difference between what Medicaid paid on the claim as originally coded and what it would have paid on the claim as downcoded. In this case, each of the 13 disputed claim determinations involves a downcode with which TCO disagrees. The following CPT codes are relevant to the claims in dispute: NEW PATIENT 99201 Office and other outpatient visit for the evaluation and management of a new patient, which requires these three key components: ? a problem focused history;? a problem focused examination;and? straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are self limited or minor. Physicians typically spend 10 minutes face-to-face with the patient and/or family. 99202 Office and other outpatient visit for the evaluation and management of a new patient, which requires these three key components: ? an expanded problem focused history;? an expanded problem focused examination; and? straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are low to moderate severity. Physicians typically spend 20 minutes face-to-face with the patient and/or family. 99203 Office and other outpatient visit for the evaluation and management of a new patient, which requires these three key components:? a detailed history;? a detailed examination; and? medical decision making of low complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are of moderate severity. Physicians typically spend 30 minutes face-to-face with the patient and/or family. 99204 Office and other outpatient visit for the evaluation and management of a new patient, which requires these three key components: ? a comprehensive history;? a comprehensive examination; and? medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are low to moderate severity. Physicians typically spend 45 minutes face-to-face with the patient and/or family. 99205 Office and other outpatient visit for the evaluation and management of a new patient, which requires these three key components: ? a comprehensive history;? a comprehensive examination; and? medical decision making of high complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are moderate to high severity. Physicians typically spend 60 minutes face-to-face with the patient and/or family. ESTABLISHED PATIENT 99211 Office and other outpatient visit for the evaluation and management of an established patient, that may not require the presence of a physician. Usually the presenting problem(s) are minimal. Typically, 5 minutes are spent performing or supervising these services. 99212 Office and other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: ? a problem focused history;? a problem focused examination; and? straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are self limited or minor. Physicians typically spend 10 minutes face-to-face with the patient and/or family. 99213 Office and other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components:? an expanded problem focusedhistory;? an expanded problem focused examination; and? straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are low to moderate severity. Physicians typically spend 15 minutes face-to-face with the patient and/or family. 99214 Office and other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: ? a detailed history;? a detailed examination; and? medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are of moderate severity. Physicians typically spend 25 minutes face-to-face with the patient and/or family. 99215 Office and other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: ? a comprehensive history;? a comprehensive examination; and? medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problems are low to moderate severity. Physicians typically spend 40 minutes face-to-face with the patient and/or family. American Medical Association, Evaluation and Management (E/M) Services Guidelines at 9-10 (2001). Turning now to the 13 disputed claims, the following is a summary discussion of each, sorted by recipient and date of service. Recipient No. 2 Date of Service ("DOS") 03/05/01. Nurse Practitioner Beverly Armstrong saw this patient, then aged 10, on March 5, 2001, because he was experiencing nasal drainage and a cough. Ms. Armstrong diagnosed sinusitis and bronchitis and prescribed appropriate medications for those conditions. The child is profoundly developmentally delayed, which complicated the examination and medical decision-making process. TCO billed this visit to Medicaid under CPT Code 99215——the highest level of E/M services for an established patient——and was reimbursed $60.95. It is undisputed, however, that Medicaid does not permit an advanced registered nurse practitioner ("ARNP") to bill any visit at the 99215 level. (If a physician co-signs the medical record, then the claim can be properly submitted as a 99215 visit, but that did not happen on this claim or any other disputed claim here involving the services of an ARNP.) Thus, there is no dispute that this claim must be downcoded. The Agency contends that the claim properly should be reimbursed as a 99213 visit; TCO contends that 99214 is the correct level of service. It is concluded that this visit met the criteria for reimbursement at the 99214 level. The Medicaid fee for ARNP services in connection with a 99214-level visit was $32.82 in March 2001, which is $28.13 less than Medicaid paid on this claim. The Agency based its probable total overpayment determination on an alleged overcharge of $35.90. Thus, the empirical overpayment should be reduced by $7.77. DOS 05/16/02. This patient was seen by Dr. Barbara Chamberlain on May 16, 2005, because he was having difficulty sleeping and was waking up scared. TCO submitted the claim for this visit to Medicaid under CPT Code 99214 and was reimbursed the established fee for that level of service. During the instant audit, the Agency downcoded the visit to 99213, resulting in an alleged overpayment of $15.71 on the claim. At hearing, however, the Agency's counsel conceded that, in view of Dr. Deeb's deposition testimony, the claim had been properly coded as a 99214 visit. Therefore, the empirical overpayment should be reduced by $15.71. Recipient No. 13 DOS 11/01/00. This patient, aged 4, presented on November 1, 2000, with a cough and fever, and was seen by Nurse Armstrong, who diagnosed bronchitis and prescribed treatment therefor. TCO presented this claim to Medicaid as a 99215 visit, which was improper because ARNP services are not authorized for payment at such level, and was reimbursed $59.43. AHCA contends that the claim should be downcoded to 99213, giving rise to an alleged overpayment of $34.38. The undersigned determines, however, that 99214 is the proper code, based on the overall complexity of the case as reflected in the medical records. The appropriate reimbursement, therefore, is $31.85, resulting in an overpayment on this claim of $27.58. The empirical overpayment should, accordingly, be reduced by $6.80. DOS 04/27/01. The patient was seen by Nurse Armstrong on April 27, 2001, complaining of fever and a recent history of vomiting and diarrhea. He was diagnosed with a middle ear infection and allergic rhinitis. After the visit, on the night of April 27, a call was made on this patient's behalf to the on- call nurse to report an ongoing high fever; the patient was encouraged to go to the emergency room for treatment. TCO improperly billed this claim for nursing services as a 99215 visit and was paid $60.95. The undersigned is persuaded by Dr. Deeb's deposition testimony that the appropriate service level on this claim is 99213, as the Agency contends. When it calculated the probable total overpayment, however, the Agency assumed, incorrectly, that the fee for ARNP services on a 99213 claim in April 2001 was $25.05. In fact, such claims were reimbursed at the rate of $21.03 per visit. Thus, for this claim, the empirical overpayment should be increased by $4.02. DOS 04/30/01. The patient presented again on April 30, 2001, with a high fever and nasal congestion. He was seen by Nurse Armstrong, who ordered blood and urine tests and prescribed additional treatment. TCO billed the visit, improperly, as a 99215 and was paid $60.95. Based on the medical records, which document a high fever that was not responding as expected to treatment, the undersigned determines that 99214 is the proper code for this visit. The applicable fee for such a visit, at the time, was $32.82. Thus, the overpayment on this claim is $28.13, not $35.90 as AHCA alleged. The empirical overpayment should be reduced by $7.77. Recipient No. 17 Nurse Armstrong saw this three-year-old on November 29, 2000. The patient came in with redness and swelling of the eyelid. The ARNP referred the patient to an ophthalmologist. TCO submitted a claim to Medicaid, reporting the visit under CPT Code 99215, which was improper because, to repeat for emphasis, nursing services cannot be billed at this level——a point that TCO conceded at hearing. Medicaid paid TCO $59.43 for the visit. The Agency asserts, and the undersigned finds, that this claim should be reimbursed at the 99213 level. The key fact here is that the patient was referred to a specialist. While this was no doubt an appropriate disposition, deciding to make a routine referral to an eye doctor for evaluation of a possible eye infection or injury should be a relatively easy medical task. The fee for ARNP services on a 99213 claim was $20.80 in November 2000. In calculating the probable total overpayment, the Agency incorrectly assumed that the applicable fee was $25.05. Thus, the empirical overpayment should be increased by $4.25 to account for this claim, properly adjusted. Recipient No. 18 DOS 07/17/02. This patient, aged 5, was seen by Dr. Chamberlain on July 17, 2002, for treatment of a cough and low- grade fever. The doctor diagnosed pharyngitis and prescribed an antibiotic. TCO billed Medicaid for a 99215 visit and was reimbursed $63.37. The Agency contends that this claim should be downcoded to 99213. The undersigned agrees, because the medical record documents a routine visit involving a straightforward diagnosis and plan of treatment. Thus, there should be no change to the empirical overpayment on account of this claim. DOS 08/08/02. Dr. Chamberlain saw this patient on August 8, 2002, because he had a fever. The doctor again diagnosed pharyngitis and offered an antibiotic injection, which the patient's mother refused. Dr. Chamberlain spent additional time counseling the mother, but she continued to decline the recommended treatment, against medical advice. TCO presented a claim to Medicaid for a 99214 visit. The Agency urges that this visit be downcoded to 99213, creating an alleged overpayment of $15.71. The undersigned finds, however, that 99214 was the appropriate code for this claim, primarily because of the need for additional counseling as a result of the mother's refusal of treatment. Thus, the empirical overpayment should be reduced by $15.71 for this claim. Patient No. 19 DOS 05/17/02. Nurse Armstrong saw this medically complex three-year-old as a new patient on May 17, 2002. The medical record does not document the specific medical complaint that drove the visit, but states that the patient wanted a nebulizer machine. The nurse examined the patient in some detail and decided to stay the course charted by other providers, directing that the patient continue taking the same medications. TCO reported the visit to Medicaid as a 99205 claim and received $85.00. This was improper on its face because nursing services cannot be billed at this level. The Agency contends that the claim should be downcoded to 99203, and the undersigned agrees. Based on the evidence presented, it is found that the medical decision-making required for this visit should not have exceeded a low level of complexity, especially since no material changes were made to the preexisting treatment plan. The fee for ARNP services on a 99203 visit was $40.23 in May 2002, not $38.70 as shown in the Agency's work papers. Consequently, the empirical overpayment should be reduced by $1.53 to reflect the adjustment of this claim. DOS 06/05/02. Dr. Chamberlain saw the patient on June 5, 2002, because she was vomiting, sleeping too much, and experiencing a loss of appetite. The doctor ordered emergency blood work, which revealed that one of the medications that the patient was taking had reached a toxic level in her bloodstream. This was a potentially life-threatening situation that required prompt medical attention. TCO billed this visit at the 99215 level. AHCA argues that the claim should be downcoded to 99213, at which level an alleged overpayment of $30.81 would result. The undersigned agrees with TCO, however, that 99215 was the proper code under the circumstances. The empirical overpayment should be reduced by $30.81 for this claim. DOS 07/08/02. The patient was seen by Dr. Chamberlain on July 8, 2002, for a "pre-op" examination ahead of a scheduled surgery to repair a hernia. The visit was billed to Medicaid as a 99215 claim, and TCO received $63.37. In this proceeding, TCO has conceded that 99215 was excessive, but it presses for a downcode only to 99214. The Agency asserts that 99213 is the proper code for this claim. The undersigned is persuaded that this focused pre-op examination should not have required a level of care beyond 99213. In July 2002, the fee for a physician's services on a 99213 visit was $32.56. The overpayment on this claim therefore is $30.81. Because the Agency mistakenly recorded the overpayment as $37.32 in its work papers and used that figure in calculating the probable total overpayment, the empirical overpayment should be reduced by $6.51. DOS 07/25/02. On this day, the medical records show that the patient was seen by Nurse Armstrong for "labs only" and to have a form completed for school. TCO submitted a claim to Medicaid for a 99215 visit (which was facially improper) and was reimbursed $63.37. AHCA now seeks to deny the claim in its entirety based on the absence of a medical record. Yet, as TCO points out, there is a record of this visit. It reflects that minimal services were performed and no examination of the patient was conducted. Thus, the claim should be downcoded to 99211. For ARNP services at this level, Medicaid paid $10.37 at the relevant time. Thus, the empirical overpayment should be reduced by $10.37 to account for this claim. DOS 09/04/02. Nurse Armstrong saw the patient, who presented with a fever and cough, on September 4, 2002. This visit took place a couple of weeks after the patient's hernia had been surgically repaired. The nurse diagnosed pharyngitis or tonsillitis. TCO presented the claim to Medicaid, improperly, as a level 99215 visit and received $63.37. AHCA contends that the claim should be downcoded to 99213. This would have been the appropriate code, the undersigned believes, but for the fact that the child had recently undergone surgery, which added an element of complexity to the case. The undersigned finds that the proper code for this claim is 99214. At the time, Medicaid paid $34.52 for ARNP services on a 99214 claim. Thus, the overpayment on this claim is $28.85. Because AHCA based its determination of the probable total overpayment on an alleged overpayment of $37.32 on this claim, the empirical overpayment should be reduced by $8.47. Miscellaneous Adjustments TCO has identified a number of alleged errors in the Agency's work papers, which will be discussed below. Recipient No. 15, DOS 12/07/00. This claim for a doctor's services was coded 99664. Medicaid paid TCO $8.00 on the claim. As part of the audit, AHCA reduced the allowable fee to $6.40, because the services at issue were in fact performed by an ARNP. This created an alleged overpayment on the claim of $1.60. TCO does not dispute that an ARNP performed the services; it asserts that the applicable fee is more than $6.40. TCO is correct. The fee for ARNP services on a 99664 claim was, in December 2000, $8.57. Thus, the empirical overpayment should be reduced by $2.17 (0.57 + 1.60). Recipient No. 30, DOS 05/03/02. TCO billed Medicaid for a doctor's services at the 99203 level and was reimbursed $50.30. AHCA determined in the audit that an ARNP actually performed the services in question and reduced the allowable fee to $40.24, resulting in an alleged overpayment of $10.06. The applicable ARNP fee schedule shows an allowable fee of $40.23. Thus, the empirical overpayment should be increased by 0.01 to account for this claim. Recipient No. 18, DOS 08/09/02. TCO correctly notes that, contrary to the Agency's allegation, there is a medical record for this visit, which shows that the ARNP gave the patient a shot of antibiotic medicine. Thus, while the Agency properly determined that TCO's claim for a physician's services at level 99215 resulted in an overpayment, it should have downcoded the claim to 99211, rather than denied the claim in its entirety, and allowed reimbursement at the ARNP fee of $10.37. Accordingly, the empirical overpayment should be reduced by $10.37. Recipient No. 17, DOS 07/10/01. TCO has identified a typographical error in a one of the Agency's work papers, where the date of service for this claim incorrectly was recorded as July 10, 2000, instead of July 10, 2001. This error did not affect the overpayment calculations, however, and thus no adjustment to the empirical overpayment is required. Recipient No. 22, DOS 09/03/02. TCO alleges that the allowed fee of $48.27 "is wrong." According to the applicable fee schedule, however, this is indeed the correct figure. Therefore, no change in the Agency's calculations is warranted. Recipient No. 23, DOS 08/07/02. TCO points out that a work paper of the Agency fails to mention the allowed CPT Code for this claim. The omission had no effect on the Agency's overpayment calculations. Recipient No. 26, DOS 07/20/01. TCO notes a typographical error in a work paper that had no effect on the Agency's overpayment calculations. Recipient No. 26, DOS 03/13/01. TCO notes a typographical error in a work paper that had no effect on the Agency's overpayment calculations. Other Discrepancies In the course of reviewing the Agency's work papers and the medical records in evidence, the undersigned discovered several minor discrepancies that should be corrected in recalculating the probable total overpayment. Recipient No. 2. The total alleged overpayment for this patient, before making any of the adjustments described above, is $1,571.93, not $1,594.42, which latter figure was used by the Agency in determining the probable total overpayment. Therefore, the empirical overpayment should be reduced by $22.49. Recipient No. 5. The total alleged overpayment for this patient, before making any of the adjustments described above, is $27.63, not $26.38, which latter figure was used by the Agency in determining the probable total overpayment. Therefore, the empirical overpayment should be increased by $1.25. Recipient No. 15. The total alleged overpayment for this patient, before making any of the adjustments described above, is $367.35, not $372.44, which latter figure was used by the Agency in determining the probable total overpayment. Therefore, the empirical overpayment should be reduced by $5.09. Recipient No. 30. The total alleged overpayment for this patient, before making any of the adjustments described above, is $42.62, not $44.16, which latter figure was used by the Agency in determining the probable total overpayment. Therefore, the empirical overpayment should be reduced by $1.54. Summary The Agency based its determination of the probable total overpayment on an empirical overpayment of $9,740.10. In accordance with the foregoing findings, it is determined that this figure should be increased by a total of $9.53, and reduced by a total of $153.11, making a net empirical overpayment of $9,596.52. In other words, the undersigned finds that, of the $13,582.78 which TCO received from Medicaid for the 260 total claims submitted during the Audit Period in connection with medical services provided to the sample population of 30 patients, $9,596.52 constituted an overpayment. Thus, it is this figure——$9,596.52——that should be used in calculating the probable total overpayment arising from the 30,193 claims presented during the Audit Period, for which Medicaid paid TCO a grand total of $1,593,881.86.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency recalculate the probable total overpayment using the statistical formula previously employed but substituting $9,596.52 in place of $9,740.10 as the empirical overpayment, and enter a final order requiring TCO to repay the Agency the principal amount determined through such recalculation. DONE AND ENTERED this 3rd day of February, 2006, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of February, 2006.
The Issue The Board filed a ten count complaint in this matter. The central issue is whether Dr. Horstmann billed Medicaid for office visits for children who he did not see and who, in fact, did not exist. The Board of Medicine contends that Dr. Horstmann's conduct violated Section 458.331(1)(i), Florida Statutes, by making or filing a report the licensee knew to be false, violated Sections 817.234 and 458.331(1)(h), Florida Statutes, by failing to perform a legal obligation placed upon a licensed physician, and that his conduct violated Section 458.331(1)(1), Florida Statutes, by making deceptive, untrue or fraudulent representations in the practice of medicine or employing a trick or scheme in the practice of medicine when that trick or scheme fails to conform to the generally prevailing standards of treatment in the medical community. The Board also contends that by pleading no contest to a criminal charge of Medicaid fraud, Dr. Horstmann is subject to discipline.
Findings Of Fact Dr. Horstmann is a 63 year old Cuban-born medical doctor. He had been licensed to practice medicine and had been doing so in Cuba for 35 years. He was permitted to leave Cuba in 1979. He was licensed to practice medicine in the State of Florida on February 14, 1983. At the time of the investigation which gave rise to these charges he had been licensed to practice medicine in Florida for 4 months. In early 1983, the Auditor General's Office of the State of Florida, Medicaid Fraud Unit, investigated certain pharmacists which computer audits showed to have excessive Medicaid charges. Dr. Horstmann was not a target of this investigation, which was headed by Detective John Nulty. The Mariano Gonzalez pharmacy was targeted. Dr. Horstmann knew Mariano Gonzalez since childhood. He had given Gonzalez business cards, asking Gonzalez to refer patients to him with allergy- related problems who did not have a doctor, as Dr. Horstmann wished to concentrate on allergy-related health problems. Those business cards were available at the pharmacy. During the investigation of the Mariano Gonzalez pharmacy, agent Vivian Perez entered the pharmacy and acted as a Medicaid recipient using the name Vivian Toledo. At the Mariano Gonzalez pharmacy on June 5, 1983, she was advised to see Dr. Horstmann and was given a Horstmann business card with the pharmacy stamp on the back of it. Apparently, the Mariano Gonzalez pharmacy was engaged in a scheme to defraud Medicaid. It allowed Medicaid recipients to present scripts for prescriptions which were to be paid by Medicaid, and to purchase merchandise rather than prescription drugs or medicine for an amount equal to what would have been charged for the medication. In the course of her investigation, agent Perez went to Dr. Horstmann's office on June 7, 1983. She presented Dr. Horstmann's secretary with a Medicaid card issued to her as part of the investigation bearing the name Vivian Toledo, and the names of the three fictitious children, Julio, Roger and Rafael Toledo. Dr. Horstmann did not examine agent Perez or any of the fictitious children, but as a result of the visit he gave agent Perez prescriptions for her and the three children. Agent Perez took these prescriptions to the Mariano Gonzalez pharmacy and used them to purchase non-pharmaceutical items. These prescriptions were not signed by Dr. Horstmann, but by Dr. Rodriguez-Cuellar, with whom Dr. Horstmann worked. Dr. Horstmann did not sign the prescriptions because, although he was a licensed physician, he had not yet received a Medicaid provider number of his own. Agent Perez again visited Dr. Horstmann on July 12, 1983. He did not examine her or the fictitious children but gave agent Perez additional prescriptions for herself and the children, which he signed. They were used to purchase non- pharmaceutical items at the Mariano Gonzalez pharmacy. Agent Perez visited Dr. Horstmann on a second occasion in July and in August 1983. Each time she received prescriptions for herself and the fictitious children which were used to purchase non-pharmaceutical items at the Mariano Gonzalez pharmacy. Dr. Horstmann prepared medical charts for each of the fictitious children, which were introduced into evidence, indicating that these children had been examined by him. Dr. Horstmann signed the Medicaid health insurance claim forms for the children dated July 9, 12, 20 and 27; and August 17 and 23. Medicaid was billed a total of $100.00 for Julio Toledo, $70.00 for Roger Toledo and $90.00 Rafael Toledo based on these forms. Dr. Horstmann understood when he wrote on the chart that he had seen the children that a bill would be prepared and sent to Medicaid. He signed all of the reimbursement forms. He received payment from Medicaid on the claims he submitted. Dr. Horstmann was charged with Medicaid fraud and entered a plea of no contest. A certified copy of the order placing him on probation was offered for identification but not received in evidence. After the certified copy of the probation order was obtained, an order was entered by the Circuit Court for the 11th Judicial Circuit sealing the records of Dr. Horstmann's conviction.
Recommendation Based upon the violations of the Medical Practice Act which Dr. Horstmann committed, including filing false Medicaid reports and billing Medicaid for treating fictitious children, as well as making deceptive, untrue and fraudulent representations in the practice of medicine, it is RECOMMENDED: That Dr. Horstmann's license be suspended for a period of six (6) months. DONE AND ORDERED this 5th day of February, 1987, in Tallahassee, Florida. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of February, 1987. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 86-1753 The following constitute my specific rulings pursuant to Section 120.59(2), Florida Statutes (1985), on the proposed findings of fact submitted by the parties. Rulings on Proposed Findings of Fact Submitted by Petitioner (Treating the paragraphs of the findings of fact as if they had been serially numbered.) Covered in Findings of Fact 2 and 4. Covered in Finding of Fact 8. Covered in Finding of Fact 9. Covered in Finding of Fact 10. Covered in Findings of Fact 11 and 12. Rulings on Proposed Findings of Fact Submitted by Respondent Covered in Finding of Fact 2. Sentence 1 covered in Finding of Fact 3. Sentence 2 covered in Finding of Fact 2. Sentence 1 covered in Finding of Fact 5. Sentence 2 rejected as unnecessary. Sentence 1 covered in Finding of Fact 5. Sentences 2 and 3 rejected as unnecessary. Covered in Finding of Fact 6. Rejected as unnecessary Covered in Finding of Fact 1. Covered in Finding of Fact 4. Generally rejected as a recitation of testimony rather than findings of fact. Rejected because whether Dr. Horstmann was familiar with Medicaid procedures is not relevant. It is clear that he understood that he submitted bills for visits which never occurred. Rejected because Dr. Horstmann's beliefs as to agent Perez' financial condition in no way justifies submitting fraudulent medicaid reimbursement requests. Covered in Finding of Fact 11. Rejected because I accepted the testimony of agent Perez that she did not provide the symptoms to Dr. Horstmann that are found in the charts for the fictitious children. Accepted in the Conclusions of Law because there was no evidence concerning bills submitted by Dr. Rodriguez- Cuellar being reimbursed by Medicaid. Covered in Finding of Fact 9. Covered in Finding of Fact 11. Covered in Finding of Fact 12. The amount received was greater than $45.00. To the extent necessary, covered in Finding of Fact 10. Covered in Findings of Fact 10 and 11. Rejected because I find that Dr. Horstmann knew that he was billing Medicare for visits which never occurred. This was not merely the result of an error by a receptionist. Rejected as irrelevant. Covered in Finding of Fact 12. Rejected as a recitation of testimony, not a finding of fact. COPIES FURNISHED: Joel S. Fass, Esquire COLODNY, FASS & TALENFELO, P.A. 626 N.W. 124th Street North Miami, Florida 33161 John W. Thornton, Jr., Esquire THORNTON & ROTHMAN, P.A. 2860 Southeast Financial Center Miami, Florida 33131 Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Wings Benton, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Dorothy Faircloth, Executive Director Board of Medicine Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issue is the amount payable to Respondent, Agency for Health Care Administration ("Respondent" or "ACHA"), in satisfaction of Respondent's Medicaid lien from a settlement received by Petitioner, Jonathan Velez ("Petitioner" or "Velez"), from a third party, pursuant to section 409.910, Florida Statutes (2015).
Findings Of Fact On September 3, 2008, Velez, then a 14-year-old adolescent child was injured while playing football in Clewiston, Florida. On the date of the accident, Petitioner had a helmet to helmet (face to face) collision with another football participant. The collision caused a hyper-extended injury and Velez immediately fell to the ground and lost consciousness. Velez suffered a C5 burst fracture, a spinal cord injury, anterior cord syndrome and subsequent injuries originating from this accident, initially rendering him paralyzed. As a result of the injuries, and subsequent ramifications from said injuries, Velez suffered extensive permanent injuries and required extensive medical treatment in Miami, Florida, from September 3, 2008, through October 28, 2013. Petitioner sued numerous defendants for his injuries, but because of waiver and release forms signed by his guardian, the parties settled the case to avoid the possibility of summary judgment against Petitioner. Petitioner recovered $430,000.00 from a settlement against defendants. The settlement's allocation included: attorney's fees (40 percent) in the amount of $172,000.00; costs in the amount of $4,789.72; past medicals in the amount of $60,000.00; and future medicals in the amount of $20,000.00.1/ ACHA, through the Medicaid program, paid $142,855.89 on behalf of Petitioner for medical benefits related to the injuries sustained by Petitioner. Xerox Recovery Services, Respondent's collection's contractor, notified Petitioner that he owed $142,855.89 to satisfy a Medicaid lien claim from the medical benefits paid to him from the proceeds received from the third-party settlement. Petitioner contested the lien amount. At the final hearing, Petitioner presented, without objection, the expert valuation of damages testimony of Donna Waters-Romero ("Waters-Romero"). Waters-Romero has 30 years' experience in both state and federal courts and has solely practiced in the area of personal injury defense, including cases with similar injuries specific to this type of case. Waters-Romero's experience also encompasses evaluation of personal injury cases based on the review of medical records, case law, and injuries. In preparation for her testimony, Waters-Romero reviewed the pleadings, depositions, answers to interrogatories, evaluations, medical records, and defendant's motion for summary judgment along with the attached documents. She also met with Petitioner's attorneys and reviewed the mediation summary, exhibits, case law on Medicaid liens, letter of discharge, and release and settlement agreement. Waters-Romero also specifically researched three circuit court orders that were entered regarding allocation regarding Medicaid liens. To determine how to value Petitioner's claim, Waters-Romero relied on Wos v. E.M.A., 133 S. Ct. 1391(2013), a United States Supreme Court case, and on the circuit court cases as guidance. She determined that every category of the settlement should be reduced based on the ultimate settlement. During her evaluation, Waters-Romero also acknowledged the litigation risk in Velez's case due to the issues with the liability and the waiver and release. Based on her review, Waters-Romero opined that the overall value of Petitioner's claim was valued conservatively at $2,000,000.00, which was unrebutted. Waters-Romero's testimony was credible, persuasive, and is accepted. The evidence was clear and convincing that the total value of the damages related to Petitioner's injury was $2,000,000.00 and that the settlement amount, $430,000.00 was 21.5 percent of the total value. The settlement does not fully compensate Petitioner for the total value of his damages. ACHA's position is that it should be reimbursed for its Medicaid expenditures pursuant to the statutory formula in section 409.910(11)(f). Under the statutory formula, the lien amount is computed by deducting 25 percent attorney's fee of $107,500.00 from the $430,000.00 recovery, which yields a sum of $322,500.00. In this matter, ACHA then deducted zero in taxable costs, which left a sum of $322,500.00, then divided that amount by two, which yields $161,250.00. Under the statute, Respondent is limited to recovery of the amount derived from the statutory formula or the amount of its lien, whichever is less. Petitioner's position is that reimbursement for past medical expenses should be limited to the same ratio as Petitioner's recovery amount to the total value of damages. Petitioner has established that the settlement amount of $430,000.00 is 21.5 percent of the total value ($2,000,000.00) of Petitioner's damages. Using the same calculation, Petitioner advances that 21.5 percent of $60,000.00 (Petitioner's amount allocated in the settlement for past medical expenses), $12,900.00, should be the portion of the Medicaid lien paid. Petitioner proved by clear and convincing evidence that Respondent should be reimbursed for its Medicaid lien in a lesser amount than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f).
The Issue The issue to be decided is the amount payable to Respondent in satisfaction of the Agency’s Medicaid lien from a settlement, judgment, or award received by Petitioner from a third-party under section 409.910(17), Florida Statutes.
Findings Of Fact On June 7, 2005, 14-year-old Michael Mobley attended a beach party. The party occurred on, near, or about the beach premises of a hotel. Michael became intoxicated through consumption of alcohol, and drowned in the Gulf of Mexico. He was revived but suffered brain damage, leaving him unable to communicate, ambulate, eat, toilet, or care for himself in any manner. Michael is now dependent on his father for all aspects of his daily life. As a result of this incident, Michael suffered both economic and noneconomic damages. These damages included, at least, physical and mental pain and suffering, past and future medical expenses, disability, impairment in earning capacity, and loss of quality and enjoyment of life. Michael’s parents also suffered damages. Michael’s father’s employer maintained a self-funded Employee Benefit Plan governed by the Employee Retirement Income Security Act (ERISA Plan). The Florida Statutes provide that Respondent, Agency for Health Care Administration (AHCA), is the Florida state agency authorized to administer Florida’s Medicaid program. § 409.902, Fla. Stat.1/ Michael’s past medical care related to his injury was provided through health benefits from the ERISA Plan administered through CIGNA HealthCare and Horizon Blue Cross Blue Shield of New Jersey, and the Florida Medicaid program. The health benefits extended to Michael through his father’s employer totaled $515,860.29. The Florida Medicaid program provided $111,943.89 in benefits. The combined amount of medical benefits Michael received as a result of his injury is $627,804.18. The ERISA Plan provided the employer (through its administrators CIGNA and Horizon Blue Cross Blue Shield), with subrogation and reimbursement rights which provided entitlement to reimbursement from any settlement of 100 percent of what the plan had paid. ACS Recovery Services represented CIGNA and Horizon Blue Cross Blue Shield, the administrators of the Employee Benefit Plan, and on behalf of these clients ACS Recovery Services asserted a $515,860.29 claim against any settlement Michael received. The Florida Statutes provide that Medicaid shall also be reimbursed for medical assistance that it has provided if resources of a liable third party become available. § 409.910(1), Fla. Stat. In 2006, Michael’s parents, David Mobley and Brenda Allerheiligen, brought a lawsuit in Okaloosa County Circuit Court to recover all of Michael’s damages. By letter dated May 24, 2011, Petitioner’s attorney sent AHCA a Letter of Representation requesting the amount of any Medicaid lien and the itemization of charges. The letter also invited AHCA to participate in litigation of the claim or in settlement negotiations. AHCA through ACS Recovery Services by letter of June 9, 2011, asserted a Medicaid lien against any settlement in the amount of $111,943.89. Testimony at hearing established that a conservative “pure value” of Michael’s economic damage claims in the case, before consideration of such factors as comparative fault, application of the alcohol statute, a defendant’s bankruptcy, and the novel theories of legal liability, was $15 million. A Joint Petition for Approval of Settlement was filed in the Circuit Court in and for Okaloosa County, Florida, on or about June 14, 2012. It stated that although the damages Michael received far exceeded the sum of $500,000, the parties had agreed to fully resolve the action for that amount in light of the parties’ respective assessments of the strengths and weaknesses of their cases. The Petition specifically alluded to pending bankruptcy proceedings, summary judgment dismissal of claims premised upon a duty to provide lifeguarding services, Plaintiff’s remaining theories of liability, available defenses, specifically including the statutory “alcohol defense” as interpreted by the Florida courts, and anticipated costs of trial and appeal. The Petition also stated: “Plaintiff’s claim for past medical expenses related to the incident total $627,804.18. This claim consists of $515,860.29 paid by a self-funded ERISA plan and $111,943.89 paid by Medicaid.” As an attached exhibit, the Petition incorporated a Distribution Sheet/Closing Statement which allocated the $500,000 total recovery among the categories of attorneys’ fees, costs, outside attorneys’ fees, lien/subrogation/medical expenses, and net proceeds to client. The Distribution Sheet allocated $140,717.54 to “lien/subrogation/medical expenses,” subdivided into $120,000.00 to Blue Cross Blue Shield of Florida/CIGNA and $20,717.54 to Medicaid Lien. The proposed settlement did not further describe the $331,365.65 amount identified as “net proceeds to client,” or allocate that amount among distinct claims or categories of damages, such as physical or mental pain and suffering, future medical costs discounted to present value, disability, impairment in earning capacity, or loss of quality and enjoyment of life. Under the Joint Petition for Approval of Settlement, most of the total recovery thus remains uncategorized as to the type of damages it represents. The Joint Petition for Approval of Settlement was submitted on behalf of the Defendants and Plaintiffs in the lawsuit, including Michael Mobley, Petitioner here. Respondent did not participate in settlement negotiations or join in the Release, and no one represented its interests in the negotiations. The Agency has not otherwise executed a release of the lien. A Release was signed by the Plaintiffs contingent upon court approval of the Petition for Approval of Settlement. The court approved the settlement, with the exception of the Medicaid lien, pending an administrative determination of the amount of the lien to be paid. This $500,000 settlement is the only settlement received and is the subject of AHCA’s claim lien. In regard to the $500,000 settlement: Michael’s parents, Brenda Allerheiligen and David Mobley waived any claim to the settlement funds in compensation for their individual claims associated with their son’s injuries; The law firm of Levin, Papantonio, Mitchell, Rafferty & Proctor, P.A., agreed to waive its fees associated with its representation of Michael and his parents; The law firm of Levin, Papantonio, Mitchell, Rafferty & Proctor, P.A., agreed to reduce its reimbursement of the $60,541.22 in costs it advanced in the litigation of the case by 75% and accept $15,135.31 in full payment of its advanced costs; and ACS Recovery Services on behalf of CIGNA and Horizon Blue Cross Blue Shield agreed to reduce its $515,860.29 ERISA reimbursement claim asserted against the settlement and accept $120,000 in satisfaction of its $515,860.29 claim. AHCA is seeking reimbursement of $111,943.89 from the $500,000 settlement in satisfaction of its $111,943.89 Medicaid lien. AHCA correctly computed the lien amount pursuant to statutory formula. Deducting 25 percent for attorney’s fees and $60,541.22 taxable costs from the $500,000.00 recovery leaves a sum of $314,458.78, half of which is $157,229.39. In this case, application of the formula therefore results in a statutory lien amount of $111.943.89, the amount actually paid. § 409.910(17), Fla. Stat. The settlement agreement allocated $120,000.00 to be paid to the ERISA plan in partial reimbursement of the $515,860.29 it had paid for medical expenses. This amount must be added to the amount of $20,717.54 allocated for other medical expenses paid by Medicaid, to reflect a total amount of $140,717.54 allocated for past medical expenses in the settlement. The $500,000 total recovery represents approximately 3.3 percent of the $15 million total economic damages. The $20,717.54 allocated to “Medicaid Lien” in the distribution sheet of the settlement represents approximately 3.3 percent of the $627,804.18 of total past medical expenses. The sum of $3,694.15 represents approximately 3.3 percent of the $111,943.89 in medical costs paid by Medicaid. The Petitioner has deposited the full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’S rights. The parties have stipulated that this constitutes “final agency action” for purposes of chapter 120, pursuant to section 409.910(17). Petitioner filed his Petition on December 13, 2013, within 21 days after the Medicaid lien amount was deposited in an interest-bearing account for the benefit of AHCA. While the evidence presented as to the settlement agreement was not sufficient to show the full amount allocated to medical expenses, the evidence does show that the total recovery includes at least $140,717.54 allocated as reimbursement for past medical expenses, which was to be divided unevenly between the ERISA plan and Medicaid. Petitioner failed to prove by clear and convincing evidence that the statutory lien amount of $111,943.89 exceeds the amount actually recovered in the settlement for medical expenses.
Findings Of Fact At all times pertinent to the issues herein either the Florida Department of Health and Rehabilitative Services, (Department), or the Florida Agency for Health Care Administration, (Agency), its successor agency, operated the Medicaid Program in Florida, a state and federally funded program to provide medical services to indigent and eligible individuals, including children, in Florida. Petitioner, Neonatology Associates, Inc., (NAI), is a provider to the Medicaid Program of the State of Florida, and is located in St. Petersburg, Florida. Its Medicaid provider number is 067920-01. It has been a Medicaid provider for approximately thirty years. Medicaid and Children's Medical Services (CMS) were, at one time, both separate components of the Department of Health and Rehabilitative Services. On July 1, 1993, responsibility for Medicaid was assigned to the Agency for Health Care Administration. Medicaid, and its fiscal agent, FMMIS, are not now and never have been a part of either Children's Medical Services or Regional Perinatal Intensive Care Center (RPICC) and neither CMS nor RPICC have ever been a part of Medicaid or its fiscal agent. RPICC serves only peripherally to Medicaid as a claims transmittal agency or billing agent. That relationship was formalized by a contract which is considered by FMMIS as a billing agent contract. The parties stipulated prior to the hearing that the medical services, which are represented by Petitioner to have been performed were actually performed and rendered, and that all of the patients for the disputed claims are assumed to be Medicaid eligible. The parties stipulated at the hearing that the five claims were submitted by Petitioner to RPICC in a timely manner; that the five claims were received by RPICC within a twelve month period from the date of service; that there was a problem at RPICC which precluded the transmittal of these five claims in a timely manner to the Florida Medicaid Management Information System, (FMMIS), the office with which they were to be filed for payment; and that there was communication by telephone and in person between officials of Petitioner, RPICC, and the Department/Agency, (CMS), in an effort to resolve the filing difficulty. These claims relate to five patients, M.H., M.C., C.J., B.A. and R.W. Claims which are not received by Medicaid or its fiscal agent within twelve months of service may not be paid pursuant to law described in the trade as the "twelve month rule." The five claims in issue here were transmitted electronically to RPICC by NAI's agent, Ms. Chandler, the RPICC billing clerk at All Children's Hospital, where the service was rendered, for subsequent re- transmittal by RPICC to FMMIS. This procedure is authorized by the Agency. However, due to technical problems not further identified, the claims were never received by FMMIS. RPICC, a part of the Department's Children's Medical Services, and operated by the University of Florida, does not adjudicate claims but merely gathers and analyzes neonatology data for statistical reporting. FMMIS, Medicaid's fiscal agent since July 1, 1993, is operated by a private vendor. The contract between Medicaid and the University under which RPICC data services are provided, and that between NAI and Medicaid, which provides for medical services, both contain the same "boiler plate" clauses. Both NAI and RPICC transmit electronic claims to Medicaid for adjudication, but neither is a party of or agent of Medicaid. FMMIS is Medicaid's agent for payment. RPICC data processing services charges are paid to the University of Florida by Children's Medical Services under their contract. Medicaid pays only for the actual medical care provided to indigent mothers and their sick newborn children. NAI has a contract with Medicaid. RPICC has a contract with Medicaid. Children's Medical Services has a contract with RPICC at the University of Florida. These are the only formal agreements involved in this situation. The contract between NAI and Medicaid provides that NAI will submit Medicaid claims "in accordance with program policies." Medicaid policy provides that receipt of electronic claims submission to Medicaid or its fiscal agent, FMMIS, takes place only upon acceptance and confirmation by FMMIS. Acceptance occurs when each claim is assigned its own identification number. Medicaid policy also provides that submittal of a claim to RPICC does not constitute receipt of the claim by Medicaid or its fiscal agent, and submittal of a claim to RPICC does not toll the running of time accounted for under the twelve month rule. The relationship between Medicaid and the RPICC data center may be likened to that of RPICC's being a billing transmittal agent for FMMIS. RPICC does not process claims submitted to it but merely forwards those it receives to the fiscal agent which operates the FMMIS. Medicaid, by letter from Mr. Thomas Arnold, dated March 5, 1990, authorized FMMIS to receive Medicaid claims from RPICC. That letter does no more than offer providers an option to have RPICC bill the fiscal agent for them, thereby creating a "billing agent" status for RPICC. It does not state that submittal of claims by providers to RPICC constitutes filing a claim with Medicaid or the fiscal agent so as to toll the running of the twelve months limit. The Medicaid Physician Provider Handbook made available to all providers expressly states that all claim inquiries be made to Consultec, a private computer services provider. Both Mr. Blasioli and the Agency's regional claims representative noted that NAI did not contact Consultec regarding the computer problems regarding the instant claims prior to the expiration of the twelve month claim filing limit. Neither did NAI make use of RPICC's internal claims tracking system during the period in issue. The evidence establishes that NAI experienced difficulty in submitting the five claims in issue. Nonetheless, within a month of being employed by NAI, its billing administrator advised Medicaid that he had addressed the problem and had established procedures with RPICC's data center to prevent future claims from exceeding the twelve month limit. NAI's difficulty with the five claims in issue were first brought to the attention of Medicaid personnel after the twelve month filing limit had expired. Though the claims in issue here were submitted electronically, NAI could have submitted these claims directly to FMMIS by traditional paper claim, omitting the RPICC channel and its potential for technical problems. It chose not to do so. The "twelve month rule" provides for exceptions which are expressly limited to those claims which are delayed by either legal action or lack of proof of recipient eligibility. An additional exception is afforded claims delayed by "crossovers" with Medicare. The rule does not provide for extension of time due to computer system error unless such error relates to processing errors which arise subsequent to Medicaid's acknowledgment of claim receipt. In essence, to justify an exception to the twelve month rule, the computer error must be Medicaid's. The Medicaid program cannot deviate from federally imposed requirements. Should it do so, it faces the potential loss of federal expenditure reimbursement which constitutes fifty-five percent of all money spent by Florida in its operation of the Medicaid program. The program processes 100,000,000 claims annually from more than 60,000 providers, paying out approximately $6,700,000,000 each year. Even minor exceptions to the rules governing the adjudication process could have extensive impact on and consequences to the program and the benefits it imparts to the indigent health care recipients it serves.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care Administration enter a final order denying as untimely Petitioner's five claims in issue. DONE and ENTERED this 22nd day of May, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of May, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-3049 To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1. - 3. Accepted and incorporated herein. First sentence accepted. Balance accepted as definitions, not Findings of Fact. - 12. Accepted. Merely a restatement of testimony in support of Petitioner's position. Not a proper Finding of Fact. Accepted. Rejected as no more than a comment on the evidence and a statement of party position. - 20. Accepted as a statement of position, but rejected as probative of any material factual issue. 21. - 24. Accepted. Accepted. & 27. Not Findings of Fact but citations of statute. 28. & 29. Accepted. Not Findings of fact but cites of agency rule. A restatement of Handbook matter. Accepted. - 35. Accepted. Accepted but non-probative argument. Rejected as contra to the weight of the evidence. - 43. Accepted. Not a Finding of Fact but a restatement of testimony. - 49. Accepted. 50. & 51. Accepted and incorporated herein. 52. - 55. Accepted. 56. - 58. Accepted. 59. & 61. Accepted, but no evidence exists that RPICC's actions constitute receipt of the claim. The evidence of record better suggests that RPICC receives information from providers based upon which it acts as billing agent for the provider and it remains incumbent upon the provider to insure it gets the pertinent information to RPICC in sufficient time for the claim to be billed within the tweleve month constrains. 62. - 65. Rejected as contra to the better evidence of record. Respondent's Proposed Findings of Fact. 1. & 2. Accepted and incorporated herein. Not a Finding of Fact but a restatement of the issue. - 7. Accepted and incorporated herein. 8. & 9. Accepted. 10. - 14. Accepted. Accepted. - 18. Accepted. 19. & 20. Accepted and incorporated herein. Not a Finding of Fact but a restatement of and comment on testimony. & 23. Accepted and incorporated herein. 24. Accepted but not probative of any material issue of issue of fact. COPIES FURNISHED: Frank P. Rainer, Esquire Ruden, McClosky, Smith, Schuster, and Russell, P.A. 215 South Monroe Street, Suite 815 Tallahassee, Florida 32310 Mark S. Thomas, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3407 Tallahassee, Florida 32308 Sam Power Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 Jerome W. Hoffman General Counsel Agency for Health Care Administration 2727 Mahan Drive Tallahassee, Florida 32309
The Issue Whether Respondent was overpaid for Medicaid claims submitted during the audit period January 1, 2004, through December 31, 2004, and, if so, what amount Respondent is obligated to reimburse Petitioner; and whether sanctions and costs should be assessed against Respondent.
Findings Of Fact This case involves a Medicaid audit of claims paid by AHCA to Respondent for dates of service from January 1, 2004, through December 31, 2004. The audit in this case evaluated 2,631 paid claims on behalf of 17 Medicaid recipients. During the audit period, Respondent was an enrolled Medicaid waiver provider and had a valid Medicaid Provider Agreement with AHCA. Respondent was authorized to provide home and community-based services to Medicaid waiver recipients. Paragraph 3 of the Medicaid Provider Agreement states that "the provider agrees to comply with all local, state and federal laws, rules, regulations, licensure laws, Medicaid bulletins, manuals, handbooks, and Statements of Policy as they may be amended from time to time."1/ Among other duties, Petitioner investigates and audits Medicaid providers in an effort to identify and recoup overpayments made to providers for services rendered to Medicaid recipients. Petitioner is also empowered to impose sanctions and fines against offending providers. Petitioner, when it identifies overpayment, fraud, or abuse, is charged with taking affirmative steps to recoup any overpayments and can, as appropriate, impose fines, sanctions, and corrective actions plans on the offending provider. Pursuant to what is commonly referred to as the "pay- and-chase" system, Petitioner pays Medicaid providers under an honor system for services rendered to Medicaid recipients. If Petitioner determines that the provider was paid for services rendered which were not in compliance with Medicaid requirements, then Petitioner seeks reimbursement from the provider. By correspondence dated December 8 and December 29, 2006, Petitioner contacted Respondent and requested records related to claims billed to Medicaid by Respondent. Respondent provided documents in response to Petitioner's requests. After considering the information provided by Respondent, Petitioner, on February 27, 2007, issued a Preliminary Audit Report and advised therein that it was believed that Petitioner had overpaid Respondent in the amount of $364,973.45. In response to the Preliminary Audit Report, Respondent submitted additional documentation that it desired for Petitioner to consider. On May 17, 2007, Petitioner, after having reviewed the additional documentation submitted by Respondent, issued a FAR and noted therein that Petitioner had determined that Respondent was overpaid by Medicaid in the amount of $259,033.49. In this same correspondence Petitioner notified Respondent that Petitioner was seeking to impose a $2,000.00 fine against Respondent; would be requiring Respondent to adhere to a corrective action plan in the form of a Provider Acknowledgment Statement; and would be assessing investigative, legal, and expert witness costs against Respondent. In response to Petitioner's correspondence of May 17, 2007, Respondent submitted to Petitioner additional documentation which resulted in the overpayment amount being adjusted downward to $212,683.06. The FAR is supported by Petitioner's staff files, testimonial evidence, spreadsheets related to overpayment determinations, and documentation submitted by Respondent. Collectively, this supporting documentation constitutes Petitioner's "work papers" within the meaning of section 409.913(22), Florida Statutes (2003).2/ Petitioner's work papers establish that Respondent was overpaid $212,683.06. Petitioner's work papers show the following with respect to the 17 Medicaid recipients whose paid claims were audited: For Medicaid recipient no. 1, Petitioner audited 9 claims. For each claim, Petitioner determined that Respondent billed and erroneously received payment for services provided to the recipient that were not authorized by Medicaid; For Medicaid recipient no. 2, Petitioner audited 388 claims. Of the claims reviewed, six were found to be in compliance with Medicaid standards. The remaining claims resulted in overpayment to Respondent because Respondent failed to produce sufficient supporting documentation related to staff eligibility to provide the services for which Medicaid was billed. For other claims, there were unexplained alterations made by Respondent to certain time entries contained in the Medicaid services log book; For Medicaid recipient no. 3, Petitioner audited 110 claims. Of the claims reviewed, only one claim resulted in overpayment due to Respondent's failure to provide sufficient supporting documentation to support the services for which Medicaid was billed; For Medicaid recipient no. 4, Petitioner audited 51 claims. Of the claims reviewed, 23 were found to be in compliance with Medicaid standards. The remaining claims resulted in overpayment to Respondent because there was insufficient documentation related to the eligibility of Respondent's staff to provide the services for which Medicaid was billed; For Medicaid recipient no. 5, Petitioner audited five claims. Of the claims reviewed, two were found to be in compliance with Medicaid standards. The remaining claims resulted in overpayment to Respondent because Respondent could not produce sufficient documentation to support the services for which Medicaid was billed; For Medicaid recipient no. 6, Petitioner audited 32 claims. Each of the 32 claims resulted in overpayment to Respondent because Respondent could not produce sufficient documentation to support the services for which Medicaid was billed; For Medicaid recipient no. 7, Petitioner audited 279 claims. Of the claims reviewed, 94 were found to be in compliance with Medicaid standards. The remaining claims resulted in overpayment to Respondent because Respondent could not produce sufficient documentation to support the services for which Medicaid was billed; For Medicaid recipient no. 8, Petitioner audited 155 claims. Of the claims reviewed, 95 were found to be in compliance with Medicaid standards. The remaining claims resulted in overpayment to Respondent because Respondent could not produce sufficient documentation to support the services for which Medicaid was billed; For Medicaid recipient no. 9, Petitioner audited 239 claims. Of the claims reviewed, 82 were found to be in compliance with Medicaid standards. The remaining claims resulted in overpayment to Respondent because Respondent could not produce sufficient documentation to support the services for which Medicaid was billed, and Respondent overbilled for certain services provided to this Medicaid recipient; For Medicaid recipient no. 10, Petitioner audited 82 claims. None of the claims reviewed were found to be in compliance with Medicaid standards. Respondent was overpaid for these claims because Respondent could not produce sufficient documentation to support the services for which Medicaid was billed, and Respondent overbilled for certain services provided to this Medicaid recipient; For Medicaid recipient no. 11, Petitioner audited five claims. None of the claims reviewed were found to be in compliance with Medicaid standards. This Medicaid recipient was authorized to receive services through December 31, 2003. For each claim, Respondent billed, and was paid for, services that were provided after December 31, 2003. This resulted in an overpayment to Respondent; For Medicaid recipient no. 12, Petitioner audited 113 claims. Of the claims reviewed, 79 were found to be in compliance with Medicaid standards. The remaining claims resulted in overpayment to Respondent because Respondent could not produce sufficient documentation to support the services for which Medicaid was billed, and Respondent overbilled for certain services provided to this Medicaid recipient; For Medicaid recipient no. 13, Petitioner audited 20 claims. Of the claims reviewed, 15 were found to be in compliance with Medicaid standards. The remaining claims resulted in overpayment to Respondent because Respondent failed to follow the recipient's support plan goals and double-billed Medicaid for services that were provided to the recipient; For Medicaid recipient no. 14, Petitioner audited 343 claims. Of the claims reviewed, 275 were found to be in compliance with Medicaid standards. The remaining claims resulted in overpayment to Respondent because Respondent failed to provide sufficient supporting documentation related to the services for which Medicaid was billed, and Respondent overbilled for certain services provided to this Medicaid recipient; For Medicaid recipient no. 15, Petitioner audited 258 claims. Each of the 258 claims was found to be in compliance with Medicaid standards. For Medicaid recipient no. 16, Petitioner reviewed 222 claims. None of the claims reviewed were found to be in compliance with Medicaid standards. The reviewed claims showed overpayment to Respondent because Respondent failed to provide sufficient supporting documentation related to the services for which Medicaid was billed, the services were provided to the Medicaid recipient by an unqualified individual, and Respondent overbilled for certain services provided to this Medicaid recipient; and For Medicaid recipient no. 17, Petitioner reviewed 320 claims. None of the claims reviewed were found to be in compliance with Medicaid standards. Respondent was overpaid for these claims because Respondent failed to provide sufficient supporting documentation related to the services for which Medicaid was billed, and Respondent overbilled for certain services provided to this Medicaid recipient. On November 30, 2011, Petitioner rested its case-in- chief in the instant matter. At Respondent's request, a third day was authorized for the presentation of evidence so that Respondent could issue subpoenas and offer evidence to rebut Petitioner's claim as appropriate. So as to allow Respondent, who appeared in this matter pro-se, adequate time to prepare its defense, the third day of final hearing was noticed for 9:30 a.m., on February 20, 2012. At 9:51 a.m., on February 20, 2012, the final hearing was announced as being in session. Respondent did not attend the final hearing on February 20, 2012, and has offered no explanation for her absence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Agency for Health Care Administration, enter a final order finding that Respondent, ARC Consulting Home Health Agency, Inc., by and through Jasmine J. Allison, Administrator, owes $212,683.06 to Petitioner as an overpayment, plus interest. DONE AND ENTERED this 19th day of April, 2012, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 2012.
The Issue The issue to be determined is the amount to be paid, pursuant to section 409.910(17)(b), Florida Statutes, from the proceeds of a third-party settlement, in full satisfaction of the agency's Medicaid lien.2
Findings Of Fact The Parties Petitioner Armando R. Payas is a court-appointed guardian ad litem for A.D.J., Jr., a minor. Petitioners Carvetta Taylor and Arthur D. Jamison, Sr., are A.D.J., Jr.'s, parents. Respondent, AHCA, is the state agency that administers the Medicaid program in Florida. § 409.902, Fla. Stat. Stipulated Facts In the underlying medical malpractice action, Petitioners alleged that the liable third-party negligently failed to provide proper prenatal care, identify and treat prenatal stress, and timely order a Caesarian section delivery. Petitioners asserted that this caused A.D.J., Jr., to suffer severe and permanent brain damage, which resulted in substantial expenses being incurred for his medical and nursing care. There also is a separate cause of action asserted on behalf of A.D.J., Jr's., parents, Carvetta Taylor and Arthur Jamison, for their own injuries for their loss of services, earnings, companionship, society, and affection of A.D.J., Jr., and for the value and expense of A.D.J., Jr.'s, hospitalizations and medical and nursing care, in the past and future. As a result of the alleged third-party negligence, Petitioner A.D.J., Jr., sustained severe and permanent brain damage, including hypoxic ischemic encephalopathy and neurodevelopment disorder. As a result of those permanent injuries, A.D.J., Jr., requires medical care and treatment for the rest of his life. AHCA, through the Medicaid program, paid $39,854.66 for A.D.J., Jr.'s, medical care related to his claim against the liable third-parties in Petitioners' medical malpractice action. Facts Based on Evidence Adduced at the Final Hearing A.D.J., Jr., is a minor child for whom Medicaid paid medical expenses for treatment for injuries resulting from third parties' failure to provide proper prenatal care, identify and treat prenatal distress, and timely order a Caesarian delivery. As stated above, as the result of this negligent treatment, A.D.J., Jr., sustained severe and permanent brain damage, including hypoxic ischemic encephalopathy and neurodevelopment disorder, which results in him suffering from a seizure disorder. As a result of these injuries, he will require a certain level of medical care for the rest of his life. Additionally, his future earnings capacity is negatively affected, due to cognitive impairment resulting from his birth-related injuries. Medicaid first made payments for A.D.J., Jr.'s, medical care in 2012. Petitioners initiated a medical malpractice action against one or more medical providers. The action ultimately settled in 2021, for $775,000.00. AHCA has asserted a Medicaid lien, in the amount of $39,854.66 against the portion of the settlement allocated to A.D.J., Jr.3 3 AHCA may assert a lien only on past medical expenses. Giraldo v. Ag. for Health Care Admin., 248 So. 3d 53, 56 (Fla. 2018). If the formula in section 409.910(11)(f) is applied to the settlement proceeds allocated to A.D.J., Jr., then the full amount of the $39,864.66 Medicaid lien should be paid to AHCA.4 Maria Tejedor, the lead attorney representing A.D.J., Jr., and his parents in the underlying medical malpractice case, testified regarding the value of A.D.J., Jr.'s, medical malpractice claim. Tejedor is a Florida Bar Board-certified attorney in civil trial practice with over 20 years of experience in medical malpractice matters, focusing primarily on civil actions involving infants and children who have sustained brain damage. She has extensive experience in the valuation of these types of cases. Based on Tejedor's experience with similar cases involving children who have sustained brain damage as a result of medical malpractice, she estimated that the full value of A.D.J., Jr.'s, medical malpractice case was $21,939,105.12. Based on A.D.J., Jr.'s, medical history, and on Tejedor's experience in valuing similar medical malpractice cases and allocating settlement amounts, she (Tejedor) testified that the $21,939,105.12 value of the medical malpractice case would properly be allocated as follows: $15,694,185.50 for future medical expenses; $1,204,418.00 for lost earnings' capacity; $5,000,000.00 for pain and suffering; $39,854.66 for the Medicaid lien; and $646.96 for another medical services lien. The underlying medical malpractice case settled for substantially less than its full value, in part because the treating physician was uninsured, and also because one of the birth-related injuries that A.D.J., Jr., incurred, 4 As discussed below, the formula in section 409.910(11)(f) creates a presumptive "default allocation" of the third-party settlement proceeds. This presumptive allocation may be rebutted in an administrative proceeding—such as this proceeding—brought under section 409.910(17)(b), to contest the amount designated as recovered medical expenses under the formula. attention deficit hyperactivity disorder, could partially be attributed to A.D.J., Jr., having inherited the condition. The $775,000.00 settlement amount constitutes 3.5 percent of the full value of $21,939,105.12 of the case. Using the pro rata method to allocate the $775,000.00 settlement to future medical expenses, lost earnings, pain and suffering, the Medicaid lien, and the other medical services lien, the value allocated to each of these categories of damages and expenses, discussed above, is multiplied by 3.5 percent, to determine the portion of the total settlement amount allocated to each of these categories. Multiplying 3.5 percent by $39,854.66, which is the amount of the Medicaid lien, yields $1,394.91. Pursuant to the pro rata allocation method, this is the amount payable to Medicaid in full satisfaction of its Medicaid lien in this case. Tejedor testified, and the case law bears out, that Florida courts and ALJs consistently have accepted the pro rata allocation method as a reasonable, fair, and accurate methodology, consistent with Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006), for allocating the settlement proceeds when the underlying third-party action is settled for less than the full value of the case. Todd Copeland testified as an expert in the valuation of damages in medical malpractice actions and resolution of healthcare liens. Copeland has practiced law for 29 years, representing injured parties in medical malpractice, personal injury, products liability, negligent security, and premises liability cases. He has testified as an expert between 10 and 20 times over the past ten years regarding the valuation of damages and liens in medical malpractice cases. He testified that $21,939,105.12 is a conservative estimate of the full value of the underlying medical malpractice case. In formulating his expert opinion, Copeland relied on the report of Petitioners' non-testifying expert, Dr. Craig H. Lichtblau, M.D.; A.D.J., Jr.'s, medical records; his own communications with A.D.J., Jr.'s, guardian ad litem; the very conservative estimate of A.D.J., Jr.'s, pain and suffering in this case; jury verdicts in similar medical malpractice cases; and his own professional experience regarding the valuation of medical malpractice cases. Copeland confirmed that the pro rata method of allocating the settlement proceeds to each specific category of damages and expenses (i.e., future medical expenses, pain and suffering, lost earnings' capacity, and the Medicaid and other medical services liens) proportional to the amount allocated to that specific category if the total value of the case had been recovered in the third-party settlement, is a fair and reasonable method for allocating the settlement proceeds. He further confirmed that the pro rata methodology is consistent with that ratified by the U.S. Supreme Court in Ahlborn. Copeland opined, based on the application of the pro rata allocation method to this case, that AHCA is entitled to payment of 3.5 percent of $39,854.66, which equals $1,394.91, in satisfaction of its Medicaid lien.
The Issue The issue for determination is whether Respondent is liable to Petitioner for the principal sum of $2,284.13, which equals the amount that the Florida Medicaid Program paid Respondent for psychiatric services provided between January 2, 2002, and June 30, 2006, to patients who, at the time of treatment, were residents of custodial care facilities.
Findings Of Fact Petitioner Agency for Health Care Administration ("AHCA" or the "Agency") is the state agency responsible for administering the Florida Medicaid Program ("Medicaid"). Respondent Womesh C. Sahadeo, M.D. ("Sahadeo") is a psychiatrist. At all relevant times, Dr. Sahadeo was a Medicaid provider authorized to receive reimbursement for covered services rendered to Medicaid beneficiaries. Exercising its statutory authority to oversee the integrity of Medicaid, the Agency in 2006 performed a "generalized analysis" of claims involving psychiatric services rendered to patients who, at the time of treatment, had been residing in nursing homes, assisted living facilities, or other custodial care facilities. In a generalized analysis, claims within a category of services are reviewed to determine whether each claim meets a particular condition of coverage or falls within a specific exclusion. The conditions and limitations of interest to AHCA in this instance were (a) the requirement that, to be compensable, psychiatric services must be provided in a hospital or physician's office and (b) the corresponding exclusion from coverage of claims for psychiatric services rendered in any other place, e.g. nursing homes or other custodial care facilities. During the period from January 2, 2002 to June 30, 2006 (the "Audit Period"), Dr. Sahadeo had submitted a number of claims seeking reimbursement for psychiatric services provided to seventeen patients who were residents of group homes or other custodial care facilities. Medicaid had paid these claims, and, as a result, Dr. Sahadeo had received payments totaling $2,284.13. Being within the scope of the generalized analysis under way in 2006, these claims came to AHCA's attention. By letter dated November 9, 2006, the Agency informed Dr. Sahadeo that the aforementioned claims would not have been compensable if the patients in question had been seen in their respective residential facilities (as opposed to the doctor's office or a hospital). AHCA demanded that Dr. Sahadeo submit records showing that the psychiatric services at issue had been rendered in an eligible setting, to confirm that the subject claims were within Medicaid coverage. The deadline for compliance with this demand was 15 days after receipt of the letter. Dr. Sahadeo did not respond to the letter of November 9, 2006. Consequently, on December 20, 2006, the Agency issued a Preliminary Audit Report, which notified Dr. Sahadeo that, because he had failed to produce records documenting the place(s) of service as requested, each of the claims under review was now deemed to have resulted in an overpayment. Dr. Sahadeo was given the choice of either remitting payment of $2,284.13 or submitting documentation demonstrating that some or all of the claims were properly paid. The deadline for furnishing additional documentation was 15 days after receipt of the report. Dr. Sahadeo did not respond to the Preliminary Audit Report. Consequently, on February 20, 2007, the Agency issued a Final Audit Report. The Final Audit Report echoed the Preliminary Audit Report in regard to the place-of-service issue. This time, however, the Agency added allegations accusing Dr. Sahadeo of violating Medicaid's record keeping requirements, and it gave notice of its intent to impose a $500 fine for his failure to furnish Medicaid related records on demand. According to AHCA, the total amount due from Dr. Sahadeo was now $2,784.13. Dr. Sahadeo timely requested an administrative hearing, giving rise to this case. Before the final hearing, Dr. Sahadeo produced some medical records underlying some of the claims in question. None of these medical records, however, clearly and unambiguously documents the place of service, the critical fact which at all times during this audit has been the focus of AHCA's interest and concern. At hearing, Dr. Sahadeo presented persuasive evidence (his testimony and that of his office manager, Sonya Robinson) that the psychiatric services behind the claims at issue were, in fact, rendered in his office, and not at the respective residences of the patients. The undersigned finds this to be the case. But the evidence also established——and the undersigned finds——that, in addition to medical records, certain professional or business records were created in connection with each of the subject claims, records which, if retained, would have shown that the patients had come to Dr. Sahadeo's office for treatment. One set of such documents comprised the "sign in sheets" that patients signed upon arrival at the doctor's office. Located at the receptionist's desk, the sign in sheet was a paper on which each patient would write his name, time of arrival, and appointment time. Although a sign in sheet was (or should have been) inscribed by every patient each time he was seen in the doctor's office, Dr. Sahadeo either did not keep copies of these documents or was unable, for other reasons, to make them available for inspection by AHCA. The other set of documents which would have shown that the patients of interest had come to Dr. Sahadeo's office for treatment consisted of the "receipts" that the doctor would sign to confirm that a caretaker had transported the patient from the group home or other custodial facility to the doctor's office for his appointment. During the Audit Period, it was Dr. Sahadeo's practice to sign the receipt and return the paper to the caretaker or driver without keeping a copy for his own records. Consequently, Dr. Sahadeo was unable to make these documents available for inspection by AHCA. Dr. Sahadeo did not satisfy his continuing obligation to retain all of the records relating to the services that he had provided to the patients whose claims AHCA is disputing. Yet, when AHCA paid the Medicaid claims at issue, it did so believing——and in reliance upon the assumption——that Dr. Sahadeo was fulfilling his affirmative duty to provide the underlying services in accordance with all the applicable policies, rules, and laws, including the requirement that records relating to a Medicaid claim be kept for five years. AHCA was mistaken in this regard. As a result of the Agency's mistaken assumption that Dr. Sahadeo was complying with the record keeping requirements, Dr. Sahadeo received from Medicaid a total of $2,284.13 in payments that were not authorized to be paid. This grand total of $2,284.13 constitutes an overpayment that Dr. Sahadeo must return to the Agency.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency enter a final order requiring Dr. Sahadeo to repay the Agency the principal amount of $2,284.13, together with an administrative fine of $500. DONE AND ENTERED this 20th day of November, 2007, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of November, 2007.
The Issue The issue to be decided is the amount to be paid by Petitioner to Respondent, Agency for Health Care Administration (Agency), out of her settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact On August 11, 2014, Amanda Baker, then 15 years old, was transferred from a medical center to a specialty pediatric hospital where she presented with complaints and symptoms of back pain, weakness, and paresthesia in her lower extremities. Over the next few days, she underwent examinations and assessments, but no steps were taken to prevent her development of blood clots/embolisms due to her immobility nor were signs and symptoms of her development of blood clots/embolisms recognized. On August 13, 2014, Amanda suffered two cardiac arrests due to blood clots/embolisms traveling to her heart and lungs. She was resuscitated, but due to a lack of oxygen to her brain, Amanda suffered a catastrophic hypoxic brain injury. She is now in a persistent vegetative state. The Agency provided $162,146.65 in Medicaid benefits associated with Amanda's injuries, all of which represent expenditures paid for her past medical expenses. Amanda's parents brought a medical malpractice action against the medical providers responsible for her care to recover all of the damages associated with her injuries, as well as their individual damages associated with their daughter's injuries. Seven defendants maintained insurance policies with a policy limit of $250,000. The medical malpractice action was settled for each of the insurance policy limits, resulting in a lump sum unallocated settlement of $1,750,000. This settlement was approved by the court. During the pendency of the malpractice action, the Agency was notified of the action. It asserted a $162,146.65 Medicaid lien against the Bakers' cause of action and settlement of that action. However, it did not institute, intervene in, or join in the action to enforce its rights, as provided in section 409.910(11), or participate in any aspect of the litigation. Application of the formula in section 409.910(11)(f) to Amanda's $1,750,000 settlement requires full payment of the Medicaid lien. Petitioner presented the testimony of Daniel Moody, Esquire, a Lakeland attorney with 30 years' experience in personal injury law, including medical malpractice. He represented Amanda and her family in the medical malpractice action. As a routine part of his practice, he makes assessments concerning the value of damages suffered by injured clients. He also stays abreast of jury verdicts in his area by reviewing jury verdict reporters and discussing cases with other trial attorneys. He has been accepted as an expert in valuation of damages. Based on his training and experience, Mr. Moody opined that the damages recoverable in Amanda's case had a conservative value of $30 million. Petitioner also presented the testimony of R. Vinson Barrett, Esquire, a Tallahassee trial attorney with more than 40 years' experience. His practice is dedicated to plaintiff's personal injury, as well as medical malpractice, medical products liability, and pharmaceutical products liability. He routinely makes assessments concerning the value of damages suffered by injured parties. He was accepted as an expert in the valuation of damages. Based on his training and experience, Mr. Barrett opined that Amanda's damages are "worth at a bare minimum – and we're talking very conservatively here -- $30,000,000." Both experts testified that using $30,000,000 as the value of all damages, Amanda only recovered 5.83 percent of the value of her damages. Accordingly, they opined that it would be reasonable, rational, and conservative to allocate 5.83 percent of the settlement, or $9,453.15, to past medical expenses paid by the Agency through the Medicaid program. The Agency did not call any witnesses, present any evidence as to the value of damages, propose a different valuation of the damages, or contest the methodology used to calculate the allocation to past medical expenses. In short, Petitioner's evidence was unrebutted. The testimony from Mr. Moody and Mr. Barrett is compelling and persuasive. Accordingly, the undersigned finds that Petitioner has proven by a preponderance of the evidence that $9,453.15 of the settlement represents reimbursement for past medical expenses.
The Issue What is the amount from Petitioners' settlement proceeds that should be paid to satisfy Respondent's Medicaid lien under section 409.910, Florida Statutes (2013)?1/
Findings Of Fact By Order entered August 15, 2013, the Circuit Court of the Twelfth Judicial Circuit, in and for Manatee County, Florida, appointed Robert Gibbons and Robert Gibbons, Jr., as joint plenary guardians of Georgia-Rose Gibbons. On April 6, 2012, Georgia-Rose Gibbons (Ms. Gibbons), who was a college freshman at the time, sustained numerous severe and permanent injuries, including a traumatic head injury, when she was struck by a motor vehicle while walking across a multi-lane road. Ms. Gibbons is totally incapacitated and currently resides in a nursing home. As of the date of this Order, Ms. Gibbons has a rated life expectancy of approximately 47 additional years. At the final hearing, Petitioners presented the testimony of Jeffrey A. Luhrsen, an attorney with extensive experience representing injured claimants in personal injury litigation. Mr. Luhrsen has practiced law in the State of Florida for more than twenty years and has tried multiple personal injury cases to jury verdict. Mr. Luhrsen opined that based upon a reasonable degree of certainty, and taking into consideration issues of comparative fault, $20,000,000 is the value of Ms. Gibbons' claim. AHCA did not offer evidence to the contrary. Mr. Luhrsen also credibly opined that the $400,000 settlement (explained below), which Ms. Gibbons received as a consequence of her injuries, did not fully compensate Ms. Gibbons for her damages. Mr. Luhrsen's opinions are accepted. The operator of the vehicle that collided with Ms. Gibbons was uninsured. Pursuant to an automobile insurance policy with AAA Auto Club South Insurance Company, Ms. Gibbons was insured in the amount of $400,000.00 against personal injury resulting from the negligent operation of a motor vehicle by an uninsured motorist. By correspondence dated September 19, 2013, Respondent informed Petitioners' personal injury attorney (PI attorney) that $220,519.42 is the amount of Respondent's Medicaid lien. In response, Petitioners' PI attorney, by correspondence dated October 3, 2013, advised Respondent that Ms. Gibbon's uninsured motorist claim against AAA was settled, pending approval of the Circuit Court, for $400,000. A copy of the proposed limited release and settlement agreement was included with the correspondence. The Circuit Court approved the settlement agreement on October 4, 2013. On October 17, 2013, Petitioners' PI attorney provided Respondent with copies of the Circuit Court's Order Granting Authority to Settle Claim on Behalf of Ward, and the executed Limited Release and Settlement Agreement. Respondent neither joined in the settlement nor participated in any way in settlement negotiations. The Limited Release and Settlement Agreement provides in part as follows: For and in consideration of the payment of $400,000, the receipt of which is hereby acknowledged, the Releasors being of lawful age, do hereby release, acquit and forever discharge, AAA AUTO CLUB, limited to the uninsured/underinsured liability limits of the Subject Policy, of or in any way growing out of any and all known or unknown personal injuries result[ing] from, related to and/or arising out of the Subject Accident. The Releasors acknowledge that the damages sustained as a result of the Subject Accident are permanent and that recovery therefrom is uncertain and indefinite. * * * 8. It is understood and agreed that this is a partial release and settlement agreement and that the payment referenced herein does not fully compensate the Releasors for the damages arising out of or related to the Subject Accident. . . . * * * 11. Although this settlement does not fully compensate GEORGIA ROSE GIBBONS for all the damages she has suffered, this settlement shall operate as a full and complete Release as to the Releasees without regard to this settlement only compensating GEORGIA ROSE GIBBONS for a fraction of the total monetary value of her damages. The Releasees in this settlement are specifically not compensating one element of damage disproportionately from any other element of damage. Given the nature of the injuries suffered by GEORGIA ROSE GIBBONS, the value of the damages associated with those injuries, and the limited ability of this settlement to compensate even a fraction of GEORGIA ROSE GIBBONS' damages, the parties have agreed to an allocation of the settlement. The parties agree that a fair assessment would place 20% of her total claim for damages as past and future medical expenses, and the remaining 80% of her total claim for damages for other economic damages and non-economic damages. Accordingly, the parties have allocated 20% of the settlement, $80,000, to past and future medical expenses and the remainder of the settlement, $320,000, towards satisfaction of other damages.2/ Respondent, pursuant to section 409.910(11)(f), calculates the amount that it is to be paid to satisfy its lien as follows: $400,000 less 25% (attorney fees) is $300,000; $300,000 less $11,029.89 in taxable costs is $288,970.01; $288,970.01 divided by 2 is $144,485.01, which is less than Respondent paid for Ms. Gibbons' treatment. Accordingly, Respondent seeks $144,485.01 in satisfaction of its Medicaid lien.3/ For the period mid-September 2013 through January 5, 2014, Medicaid paid $14,402.94 in additional medical assistance benefits on behalf of Ms. Gibbons. There is no evidence of record indicating that Respondent amended its lien to reflect the additional benefits paid.
